If Dropbox can transform how we work, it will be worth billions

Despite the occasional outbreak of neo-luddism, one likes to think most people agree that the internet has made our lives better. Instant global communication has transformed huge parts of our daily lives; we can find a piece of information instantaneously, buy practically anything with a couple of clicks, and order a cab with just a tap.

Despite the occasional outbreak of neo-luddism, one likes to think most people agree that the internet has made our lives better. Instant global communication has transformed huge parts of our daily lives; we can find a piece of information instantaneously, buy practically anything with a couple of clicks, and order a cab with just a tap.

But there is a major aspect of our lives that has been stubbornly slow to change: office life. Yes, phone calls and letters have been replaced by emails, and almost all of the industries that we work in have been massively reshaped by the web, but our routines and working practices have evolved remarkably slowly.

Although most of us have powerful computers in our pockets, workers often remain tied to their desks. We spend hours in meetings that many attendees secretly, or not so secretly, loathe. A generation ago, office technology was miles ahead of that in the home, now the reverse is true. And email, rather than making us more productive, has become a gargantuan battle against time, working hours out of every working day.

A clutch of tech startups are now trying to make work better. Last week, I spent two days talking to executives, customers and investors at Dropbox, one of the most high-profile of these.

Dropbox was born in 2006 when Drew Houston, its founder, was caught on a four-hour bus ride from Boston to New York without the USB drive that held crucial files about his fledgling education startup. Within minutes, he had begun coding a solution - a service that stores filed in the cloud, allowing users to access them online and from any device, and share them with others.

While there were other online storage systems, they were clunky, slow, and difficult to navigate. Dropbox essentially replicated the files and folders system that we are used to on our home computers in a “magic folder” in the cloud, and made it work seamlessly. “It just works” is an expression commonly associated with Apple, but is also displayed on a wall at Dropbox’s San Francisco headquarters.

Steve Jobs even believed that Dropbox would be a perfect fit for Apple. In 2009, Jobs invited the 28-year-old Houston to his office in Cupertino, and made him a nine-digit offer. When Houston said no, determined to build his own business, Jobs cast doubt on Dropbox’s ability to go it alone, saying its service was “a feature, not a product”.

Although Dropbox grew rapidly, earning a $10bn private valuation two years ago, several critics have suggested recently that Jobs may have had a point.

Shortly before Jobs’ death in 2011, he announced iCloud, which lets Apple users share documents, music and photos online. A year later, Google unveiled Drive, a direct rival to Dropbox. Microsoft and Amazon also offer similar products, so the world’s four biggest technology companies are now in competition with Dropbox. And the cost of online storage has shrunk to next-to-nothing thanks to internet hosting providers like Amazon Web Services.

Dropbox’s core product, critics argue, has been commoditised. The service is still among the best out there, but core features have been replicated at companies with much bigger footprints.

Which brings us back to the modern office. As it has faced stiff competition in the consumer world, Dropbox has restyled itself as a business that sells to businesses, promising to solve many of the inefficiencies that plague the modern workplace.

“This world is still way more complicated than it needs to be,” says Houston. “We all see the things that have changed, but I’m kind of shocked at how much things have stayed the same. We’re still using the same old tools and workflows, and we spend our time duct-taping these tools together from the last 40 years of computing.”

Dropbox, and other startups like Slack, Quip and Asana, are all trying to solve this problem. Dropbox launched a “for business” service in 2011, adding new features that allow workers to collaborate and communicate within the service. It is promising to introduce many more, starting with Paper, an online notes service that lets groups of people put together a project within an online document.

The vision Houston is selling is one of effortless connections between workers in a fragmented world, in which everything is available no matter where workers are, letting them pick up work seamlessly and be far more productive.

To create a viable business, Dropbox is hoping to convert its huge base of 400 million personal users, many of whom already use the service at work, into corporate customers. It is a route that has worked remarkably well for Apple, which now has a $25bn-revenue enterprise business largely because executives wanted to be able to use their iPads at work, but there are big questions about whether Dropbox can follow.

As with the consumer market, it has some big competitors in this world. Google and Microsoft are signing companies up to their cloud computing tools, as is Box, a direct rival.

And analysts have raised questions about whether Dropbox can convince slow-moving and security-conscious IT departments to adopt its service.

But the potential prize - making the outdated way offices operate less frustrating - is a huge one. If Dropbox can change the way the world works, its $10bn valuation will be justified many times over.